The Central Reserve Bank of Peru (BCRP) has recently signed an agreement with NPCI International Payments Ltd (NIPL) to develop and deploy a real-time digital payment system similar to the Unified Payments Interface (UPI) in Peru. With this partnership, Peru becomes the first South American nation to adopt NPCI’s technology and is also NIPL’s second collaboration with a central bank to implement a UPI framework internationally.
Key highlights
- This partnership will enable Peru’s Central Bank to develop a reliable and real-time payment ecosystem in the country.
- This will not only reduce reliance on cash-based transactions and support the bank to reach out to the unbanked and underbanked population.
- Peru aims to promote financial inclusion while encouraging people to adopt digital modes of transactions.
- The partnership ultimately aims to strengthen financial infrastructure and propel economic growth.
- Last month, NIPL signed an agreement with the Bank of Namibia to develop a UPI-like instant payment system to boost the economy.
About the Unified Payments Interface (UPI)
- It is an advanced and simplified payment system that is faster and more convenient, resulting in huge attraction from the people. It can also be called an upgraded version of Immediate Payment Service (IMPS).
- UPI allows the functioning of multiple bank accounts into a single mobile app while offering several banking features, resulting in enhanced ease.
- It was launched in 2021 by the National Payments Corporation of India (NPCI), which also oversees its operations.
- The RBI, along with NPCI, plans to introduce UPI in 20 countries in the next 4-5 years.
- Many countries, including France, Sri Lanka, Singapore, UAE, Bhutan, Nepal, and Mauritius, use UPI to encourage digital transactions, which is considered safe.
- The UPI is very popular in India today. Billions of transactions are processed here every month. Its acceptance is further rising.
- NPCI is a joint initiative of the RBI and Indian Bank Association (IBA) and is a ‘not-for-profit’ company. It functions under Section 25 of the Companies Act 1956.